Closing the Order Book

It is with the utmost regret that we let the community know that we have decided not to reopen Demex. Following the 25 September bridge exploit, we will sunset the platform and process the withdrawal of funds to users in an orderly way.

This post explains how your account will be settled, when you can withdraw, what happens to DMX and nLEND, and how to tell us if something looks wrong. If you have balances in Demex, please read this post in full before withdrawal goes live at the end of October.

The Demex team will top up the ~$192k lost from the bridge exploit. However, after much exploration and debate about the possible options, all routes have led to the same sobering conclusion.

Why we should sunset

We remain firm in our belief that the vision we set 8 years ago was prophetic, and while luck might not have been on our side, history has been.

We started our journey believing that every chain needs a DEX, and a proper DEX is able to support every chain. When building on the initial L1 chains became unviable, we forecasted that the cross-chain "everything" exchange would be the final transformation of the space. We were one of the first adopters of the now ubiquitous Cosmos SDK stack, and set out convincing funds of the certain eventuality of our strategy, and that the upside was tremendous. Back then, we were already convinced that even if we did not build it, someone else would, and thus reap the rewards.

Unfortunately, the result of building such products is not path independent, and while Demex has not found the traction it needs to keep going, we acknowledge that Hyperliquid has since shown that this model works at scale. We are proud to have built toward it, and are grateful to everyone who built, traded and participated alongside us.

Today, the adversarial environment has changed. Running a decentralized exchange safely takes a well-funded, fully staffed team that is able to continuously defend against new threats as AI tools now let attackers probe complex systems patiently and relentlessly. The increase in frequency of exploits throughout the space shows the result of this evolution. As such, we no longer believe that we can meet that very high bar responsibly. While it goes against our very spirit and desire, the right thing for us is to close the platform and return whatever funds we can while we still can.

How your funds will be settled

We will automatically settle every account based on the balances and prices at the moment the chain halted. Trading, lending, and all other actions will be disabled. The only thing users will be able to do is withdraw.

• USDC: We will top up the L1 smart contracts as needed so these can be withdrawn in full. Only the Arbitrum chain will be supported for withdrawal.
• DMX & nLEND: See below.
• Other tokens: All other tokens will be priced in USD and returned in USDC to facilitate simplified bridging. Some assets no longer have backing, including ZIL (legacy chain halted) and tokens from retired IBC chains (chains deprecated). These will be priced at $0 and require manual settlement with the team should there be a possible resolution.
• Perpetuals: All open positions will be closed at the halt price in USDC.
• Open orders: All orders will be cancelled, with any locked funds returned to your balance.
• Liquidity pools: Pool shares will be redeemed back into the underlying tokens, before being converted if need be, as above.
• Nitron: Outstanding debt will be cleared against your collateral at its value when the chain halted, and any deposits or collateral left will be credited to you in USDC. Bad debts and shortfalls will be topped up as mentioned above.

There will be a withdrawal page that will show your balances before and after settlement, with each change explained line by line.

Using the withdrawal page

When restored, the main Demex app will only show you the withdrawal page, detailing exactly how your account is settled. It will let you withdraw everything via gas-free transactions.

Check your statement. You will see your balances at the halt time, next to the prices used, alongside the settled USDC value for every asset. Details such as positions closed, liquidity pool shares redeemed, and Nitron settlement breakdown will also be visible.

Timeline

The withdrawal page goes live by the end of October. From that day, you will have 30 days to review your settlement. During that time, we will restore IBC connections to Axelar. After that review period, users have 90 days to withdraw using the UI.

1. End of October: The withdrawal page goes live, showing your final settled balances. No trading or other actions are possible.
2. 30-day review: Check your statement. If anything looks wrong or unfair, email settlement@dem.exchange. The team will review every claim and make manual adjustments where they are approved.
3. 90-day withdrawal window: Once the 30 days pass, we treat your settlement as accepted. You then have 90 days to withdraw.
4. After 90 days: the withdrawal window closes and we can no longer provide support. Please do not leave it to the last week.

DMX and nLEND

With Demex closing, DMX no longer has a credible use. There will not be a withdrawal option as such, and we will instead record your final balance permanently.

• DMX airdrop: We will credit the remaining 90% of the DMX airdrop to eligible accounts, and the withdrawal page will show your final settled amount.
• Final record on Ethereum: We will issue an ERC-20 token on Ethereum recording each account's final DMX balance. Think of it as a final points statement. It keeps a permanent, public record in case there is ever an opportunity to build on it later. For now, we plan to make it non-transferable.
• nLEND: nLEND now trades at about 0.09 of its original value of 1. nLEND holders will receive an additional DMX credit as well, at a ratio we will confirm. Your final nLEND balance will also be issued as an ERC-20 on Ethereum, so that any future clawbacks or claims can be credited to you.

None of these tokens are a promise of future value. They are a record, so that we are able to credit or reward you in the future if the opportunity arises.

Goodwill refund for recent DMX buyers

If you bought DMX in the 90 days before the halt and were a net buyer over that period, we will refund your purchase out of goodwill. We are doing this because recent buyers came in expecting an exchange that would keep running.

Refunds are handled manually. Email refunds@dem.exchange with your Demex address, and we will check your account history and reply.

Contacts and last words

• Something wrong or unfair with your settlement: settlement@dem.exchange (within 30 days of the page going live)
• DMX goodwill refunds: refunds@dem.exchange

Thank you for trading, lending, and building with us. Demex was carried by this community for years, and we are sorry that it ended this way. We will keep you updated on our X and Telegram until the final withdrawal window closes.

The Demex Team